Skip to main content

tv   Bloomberg Daybreak Asia  Bloomberg  March 31, 2021 7:00pm-9:00pm EDT

7:00 pm
haidi: good morning. we are counting down to asia's major market open. shery: our top stories this hour. president biden launches his campaign spending plan, already drawing opposition from public and lawmakers. asian stocks set for a firmer open tracking gains in the u.s..
7:01 pm
traders are assessing biden's plan and what it means for the market. the sec is said to have started an investigation into bill huong. -- hwang. the investigation is in early stages and may not to allegations of misconduct. haidi: taking a look at a couple of key stocks. amp, appointing a new ceo, as well as cba for the lawsuit is that it is facing -- lawsuit is facing. a mixed picture for the dollar overnight. throwing ahead to japan, we are awaiting numbers as well. a quarter of a percent higher for futures trading in chicago. shery: president joe biden has kicked off his $2.25 trillion structure push, setting the
7:02 pm
stage for a drawnout battle. the american jobs plan lays out an eight year package that features spending on infrastructure, eldercare, and research along with corporate tax increases. >> anyone making over $400,000 will see their taxes go up pe riod. we are going to raise the corporate tax. they reduced it to 21%, we're going to raise it back to 28%. the american jobs plan is the biggest boost in nondefense spending on records. global leadership is up for grabs. markets like battery technology micro technology, clean energy, and competition with china in
7:03 pm
particular. haidi: let's get over to our congressional reporter in the sea. --in d.c.. talk to me about the pushback. we have this chart showing how the biden administration plans to pay for all of this. we know that tax restrictions took a hit with the lockdowns. as we take a look at this chart, it highlights how the bulk of this is going to need to be paid by higher corporate tax rates and tax collection. we are going to see a bit of a fight over this. >> absolutely. the biden plan calls for raising the corporate tax rate and also seeks taxes on u.s. profits that u.s. corporations earns overseas. it would also be a tax on
7:04 pm
earners who make more than $400,000 a year. we already heard opposition from republicans. they passed their big tax package in 2017 and mitch mcconnell has said that if democrats make any attempts to overturn parts of that, that republicans will be opposed. so we are already expecting attacks on that in particular, however this is more of a bipartisan solution than other ideas. shery: we need more consensus when it comes to parts of the package and increasing competitiveness against china. >> potentially. i think there is a reason we have seen president biden bring out the infrastructure package. we will talk about expanding
7:05 pm
health care, paid sick and leave days. infrastructure does tend to be a bipartisan issue and lawmakers on both sides of the aisles say that american infrastructure does need a boost. however they said they don't want a bill that focuses on infrastructure and a number of things. they don't want a bill that is spending as much as president biden is proposing so you are going to see a reach to the white house from republicans. behind the scenes, there is a growing sense democrats will have to go after this alone. haidi: our congressional reporter emily wilkins in d.c.. joining us for insight on bidens -- biden's plan is annelizabeth konkel, indeed hiring lab economist.
7:06 pm
can you hear me right now? it seems we have a little bit of a problem connecting, but we will try to get back to her. we have seen this optimism in the markets when it comes to that spending package. the bided administration raising concerns about the policy tools the administration is using. this is according to beijing. it also says it is likely to do long-lasting damage to u.s. interests. the ustr says it is working with japan and the eu to address china subsidies. one of hong kong's top police officers has warned residents against testing the redline when it comes to the proposed security law.
7:07 pm
the hong kong police deputy commissioner defended the police force and arrests made in the wake of the bills passing, saying the city faces pressing national security threats, including from the u.s.. >> i am talking about the united states. i think it is clearly stated what their intent is, to suppress the development of china. it is an open secret. shery: myanmar's ousted parliament is planning to set up a national unity parliament in defiance of the military junta. the government will be a coalition of federal democratic forces under collective ship with ethnic armed groups playing a key role. the military junta has declared the committee to be unlawful. haidi: we are just getting an
7:08 pm
update when it comes to the state of that three-day lockdown in brisbane. there had been concerns with a number of clusters including the u.k. variant. apm there is saying they will be removing the lockdown on thursday just in time for the easter long weekend. shery: let's turn back to president biden's new to trillion dollar package and its impact on the u.s. economy. we're going to try to connect to annelizabeth konkel, indeed hiring lab economist. we have seen solid jobs growth in the u.s.. how much will this package help? >> it is definitely ambitious,
7:09 pm
and absolutely massive bill. economists have been pouring through it today and it is way too early to tell because there is the question of will it get past. and if it does get past, what form will it pass in? shery: we are expecting jobs data this week and have already seen some strong numbers from the private payroll numbers. thhe bluebird -- on bloomberg shows we are far from pre-pandemic levels. where do we need to make progress? >> on indeed, we have been tracking job postings and last friday, job postings were up 13.5% after adjusting for seasonal variation. some of the sectors doing well our pharmacy loading stocking,
7:10 pm
and things associated with the covid economy just the reality of the public health situation. on friday, we will be looking at the hospitality and leisure sector, where resolve most of last month gains, particularly in food service and drinking. hopefully the spring weather will be a boost. haidi: what are you seeing that is perhaps more interesting than the headlines? >> watching the prime age of the labor force participation rate, it was 82.9% net sitting at 81 point 1%. -- now sitting at 81.1%. women's labor rate and employment has still not recovered as much as men so that
7:11 pm
is something that is very important to watch. haidi: we talk about the inequalities that have been exacerbated by the pandemic. are there concerns it will be a hard slog for women participation in the workforce? >> it is definitely a looming challenge. we ran a survey looking at women's comfort asking for pay raises, promotions before the pandemic, compared to now. we found that women's comfort has fallen more than men. that has an impact on earnings and in general a large labor market impact. shery: how concerned are you with people not getting back to the labor force? >> long-term joblessness may be a major hurdle. it made up 41.5% of total
7:12 pm
unemployment in february. a year prior, is made up 19%. -- it made up 19%. we really want to see that number drop and we don't want to have that long drop have had after the great recession were experiencing long-term joblessness for years. haidi: great to have you with us. still ahead, we will be discussing the japanese economy. a board policy member joins us. up next, a probe has been opened into bill wong -- ohbill hwang -- into bill hwang.
7:13 pm
7:14 pm
7:15 pm
haidi: not to the latest on the fallout from the implosion of our tickets capital -- the implosion of archegos capital. the fec has ordered a probe on the family office. what are we learning that is new? >> bloomberg has learned that the fec began a formal civil investigation into bill hwang in the last few days. it is still in the early stages and is being led by the sec enforcement division. the sec will routinely get involved or open a review when there has been a major hedge fund blowup and the inquiry may not result in allegations of misconduct. archegos capital was unable to
7:16 pm
meet a major margin call last week. a group of banks unwound their positions for the fund, again a series of large block trades that caused a major market rout. -- route. the sec previously looked into hwang in 2012. his fund was accused of illegal trading to chinese banks and paid more than 60 million in penalties. haidi: we are also continuing to hear about the losses incurred by the banks. >> the security head of japan's largest bank said it be posting a 270 million loss, a little bit less than 300 million they had previously estimated.
7:17 pm
deutsche bank was able to dodge a loss of up to 4 million by quickly finding one big buyer in a private sale. they join oldman and wells fargo -- goldman and wells fargo. credit suisse however has exposure of up to 4 million and has warned investors -- 4 billion and has warned investors it may be taking up to a 2 billion loss. haidi: su keenan in new york with the latest. we will be back on daybreak: asia . this is bloomberg.
7:18 pm
7:19 pm
♪ haidi: a quick check of the latest business flash headlines. amp's chief executive is stepping down, capping off a troubled tenure.
7:20 pm
he will be replaced. australia's oldest wealth manager has been rocked by criticism and mishandling of a sexual assault allegation. deliver room -- deliveroo's debut was the worst performance in decades for a listing in the u.k.. india's first unicorn in moby is set to go public via a u.s. listing that could offer as much as $1 billion. the mobile advertising services business is owned by softbank. jp morgan, goldman sachs, and citigroup are reportedly working on that ipo. haidi: more countries are renewing lockdowns and restrictions as infections rate rise. chile has now launched one of
7:21 pm
the world's most successful vaccination plans, beating -- following only israel and the uae. >> in june or july, we could have 80% of the vaccination populated. >> how urgent is this, given you had to lockdown santi ago and other districts -- santiago and other districts as well. >> we have started to see results in the early population, which have gotten the results first. -- gotten the shots first. it is a two-way avenue. keep vaccinations rolling out but also strict social distance. shery: what does it mean for when the lockdown will continue? >> we have an important
7:22 pm
milestone couple of weeks now a national election had to be rescheduled from april to may. so we are taking very stringent measures so we can have that -- election with better infection rates. a large number of chileans will already have their first dose, and everybody above 56 years old should have their second dose by then. haidi: your expecting to list -- lift the lockdown before elections. what does that mean for trade? >> it is doing better on a daily basis so we still don't know. it depends on the numbers. we have also learned from last year's experience, airports are
7:23 pm
open for trade cargo flights and the people who work there have been considered essential and have already got them and received their shots. you can see based on the last year there trades on 2020 group to 2.5% compared to the year before. we are seeing resilience in terms of this and we have seen some sort of commodities rally which has impacted our corporate exports. we hope that keep steady overtime. >> has the suez blockage affected you at all? >> not really. even our trade, two thirds goes to the asia-pacific and we are links directly with them through the pacific ocean. in terms of global value chains,
7:24 pm
this could affect some imports coming through chile and the global impact of this. the dollar also is somewhat keeping steady. we will have to see how it goes. from our perspective, when it comes to exports, it should not affect. haidi: china is your biggest trading. is that being reflected on the ground in terms of demand? x yes -- >> yes. our exports to china grew and we are the main supplier of china today for over 30 different products. fresh cherries, copper, other goods.
7:25 pm
we have seen recovery in china is driving steadily the price influence in commodities such as copper, which is half of our exports. so yes, it is driving it. we have learned how to deal with that market in the context of the pandemic, changes in consumer patterns and different channels and we hope it is performing well. shery: we have breaking numbers when it comes to the italian chipmaker, reporting, just shy. revenue at 27.5 billion growth margins at 23.8%. they are also forecasting 2021 capex of $4.3 billion. this is one of the major players at the center of china's grand plans to achieve ship supremacy
7:26 pm
as well as independence. shery: let's turn to another chinese giant baidu. it has been overshadowed recently by alibaba and tencent. in an exclusive interview, the ceo and cofounder tells tom mackenzie about baidu's decades long transformation. >> if used to take three years to get a car onto market. we will try to get it sooner rather than later. last year, we spent 20 billion renminbi in r and d. this is more than any other ev company has spent. we are determined to spend a lot for years to make sure we have the best and strongest thomas platform. >> sounds like robert lee versus
7:27 pm
elon musk. do you think you will be able to take on tesla? >> i think we are quite different. we are an open platform. we want anybody to be successful. we don't just want to build our own car. we also supply technology to other oems. we want them to use our capabilities. around the taxi, we want consumers to enjoy true self driving cars sooner rather than later. we want to save their ride-hailing costs. there are lots of things we can do and we can partner with people to do that, so this is where we are different than tesla. haidi: you should tune into the bloomberg special.
7:28 pm
up next, we will be hearing exclusively from the dallas fed president on how infrastructure spending should be viewed differently than other fiscal spending. this is bloomberg. ♪
7:29 pm
(announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.
7:30 pm
shery: let's take a look at the day ahead. mitsubishi bank said it will book $270 million in losses from its exposure to archegos, slightly smaller than initially estimated. on the fixed income front, we do have a 10 year bond sale. the j ob saying -- the boj saying it will cut bond sales. we are also awaiting pmi data in the next hour.
7:31 pm
in south korea, we have march trade data do in the next half-hour. we saw exports again in the first 12 days of the month. carmakers will announce car sales for the month and the finance ministry will also release its bond issuance plan for april. haidi: and of course, we are ever watching the inflationary impact of president guidance infrastructure plan. robert kaplan says some inflationary pressures will be the likely trade-off, but it is worth it for long-term gdp growth. he spoke exclusively to bloomberg's michael mckee. . >> the important thing i look at on infrastructure, we have had a lot of fiscal spending which is necessary to emerge from the pandemic, a lot of that will
7:32 pm
fund current consumption, so the impact that has is it creates a bump in g. -- in gdp. infrastructure spending is a long-term investment and i mean it's investment you make today or over the years and it should help create higher potential gdp growth, higher sustainable growth, and productivity. i would differentiate infrastructure spending from other fiscal spending and it is clear we need more wi-fi in this country and other infrastructure spending to make us more productive and make more sustainable growth in the future. i think that is a positive thing. >> the government has spent trillions fighting the pandemic and you expect that lead to some transitory inflation.
7:33 pm
the fed thinks we will get to 3.5% on appointment anyway. robert joe biden is saying these should be good union jobs that pay more. does that make the danger of inflation greater? >> it clearly creates more demand. -- more demand for workers. we already know the impact of cyclically low inflation. this will do that even more. this is an investment worth making it it will have that effect. we have to see how those cyclical forces are outweighed by technology. those forces are also strengthening. i have said several times, you
7:34 pm
will see inflation moderate through 2021 and then through 22 and 23, but it is wise as a central banker to have a good dose of humility as it all unfolds. it is precedented and you can keep an open mind and be open to learning and adjust views as this unfolds. >> what did analysts say would be the impact of a green energy program on your district, the heart of the oil and gas industry? >> a lot of what has been going on has been internalized ready significantly. what i mean by that, we are seeing energy companies across the board spending and planning to spend billions of dollars on
7:35 pm
how to reduce greenhouse gas emissions. carbon capture and sequestration , how they deal with water, sand, and other things, and a substantial amount of capital going into battery storage and other renewable our entity. -- other renewable research and development. it is very difficult to attract capital to fossil fuels. yet even with aggressive transition, our own analysis is that we are going to be dependent on a healthy fossil fuel industry for the next two or three decades. haidi: let's now get to vonnie quinn with the first word headlines. >> the world health organization has raised projections, forecasting and 8% rise in global trade.
7:36 pm
the director general says the projection would be tied to virus construction, warning that new waves could undermine recovery. she criticized vaccine nationalism, saying slower rollouts could lead to cuts in the forecast. >> no longer can we expect poor countries to stand in a queue. 70% of vaccine doses today have been administered by 10 countries. the inequity of access is glaring. >> biden says his covid-19 vaccine is 100% effective in children aged 12-15 and is seeking to add adolescents to its authorization. it is already approved for use in those 16 and older. pfizer and biontech said a plan
7:37 pm
to submit the data to regulators as soon as possible. emmanuel macron has stepped up virus restrictions posing a nationwide lockdown. it is an attempt to change -- contain a surge in tobin 19 infections. it includes a nationwide -- covid-19 infections. includes a nationwide lockdown and domestic travel. -- travel ban. global news, 24 hours a day on air, on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: coming up next, sweeping changes to the hong kong electoral system. we will be hearing from a hong kong police chief about these new powers. this is bloomberg.
7:38 pm
7:39 pm
> police in hong kong can now that candidates for local office after beijing increased control over the electoral process. stephen engle spoke with the deputy commissioner about the changes. >> risks to national security israel and i would say there is potential given the hostile international environment we find ourselves in, especially because there are countries on earth whose basic dna is
7:40 pm
aggressive. >> you are alluding to the united states? >> yes. they have clearly stated their intent to clearly suppress the development of china. it's an open secret. >> so hong kong has been the pawn in your estimation that has led us down the road we are on now, where we have electoral reform and perhaps more assertive policies from beijing. >> i think so, because this is in the geopolitical interest of america to do. on the ground, i certainly see compatible evidence of such action. i'm not necessarily trying to pass moral judgment on this. our country is trying to further
7:41 pm
its strategic interests, it is just the barometer. but we are entitled as countries to protect our own interests. >> what does that mean for the security blanket over hong kong? more surveillance? more police on the street? more review of social media? i am not saying it is a police state, but that is the international perception. >> that perception is wrong. let me tell you this as a police officer, our concern has always been life issues, whether you are safe going out or night, whether you are safe to allow your teenage daughter to go home by yourself. we are entitled to stability. because that is the only way
7:42 pm
that society can function and i think the events of 2019 have shown you that when stability breaks down, society becomes totally dysfunctional. we were on the brink of collapse in many places in the world. >> how are you trying to repair the trust deficit that has been built up between the populace and the police? used to be referred to as asia's finest. >> used the word populace. i have to disagree. this is where the propaganda -- >> some in society. >> that is how propaganda works.
7:43 pm
>> fair enough. >> i do not disagree with you, there is a trust deficit, as a result of the propaganda. haidi: for more, let's bring in stephen engle. a really interesting conversation. what stood out to you in that chat? >> it was a wide-ranging interview. talk about geopolitics quite extensively given the situation hong kong is in and there are differences. we kind of started the interview about the electoral changes, and national security please will be passed betting those candidates for legislative council. he immediately said assessing
7:44 pm
security threats is an ongoing process and that is have a section of the interview began. they also talked about red lines. what can people in hong kong do or say that keeps them from being in jeopardy legally? like he did in that segment, he said i twisted the words of and bit, because he says that is not the way to think about it. should not be think about how far to test the redline, we should be thinking about how we can stay well in the safe sound. not testing the boundaries, being responsible citizens. he said and i quote, do not tempt the law. he was very matter-of-fact about that. he went on to talk about some of the protester cases working through the courts here have been dismissed.
7:45 pm
some have been dismissed, according to the magistrate, because of police fabricating or misleading some of their test in court and some of those cases were tossed out. deputy commissioner kwak explained that some of these officers were inexperienced, nervous, or the victims of clever tactics by defense lawyers but they are working with police officers to be better prepared for court. >> stephen engle there in hong kong. >> shery: let's return to the latest business flash headlines. regulars have approved the restructuring of sinochem and chemchina after years of speculation about a merger. it will become subsidiaries of a new holding company. sinochem says it will aid the development of china's chemical industry. both companies were added to the
7:46 pm
pentagon's blacklist for having links to the chinese military back in 2020. goldman sachs is close to offering investment vehicles for bitcoin and other digital assets. the bank recently named mary rich as global head of digital assets. micron gave an up beat forecast earning thanks to strong demand for semi conductors. the largest maker of memory chips expects revenue of $7.1 billion. it also expect profits of 1.26 pressure. -- per share. profits have been boosted by the need for devices needed to study for -- boosted by devices needed to study at home. >> a keoi university board
7:47 pm
member joins us. coming up a conversation with robin li, 5:30 p.m. on friday hong kong.
7:48 pm
>> we are awaiting the imminent release of a survey from japan,
7:49 pm
expecting improvement in the manufacturing sector. we are joined by keio university professor sayuri shirai . always great to have you with us. what are your expectations, as we continue to think about the semi conductor shortage? >> much of the survey data will show an improvement in manufacturing, but i want to see what will happen to the outlook months from now and to what extent manufacturers are concerned. as for the other sector, i'm not sure to what extent receipt improvement because of covid-19 problems. haidi: in terms of expectation
7:50 pm
for improvement, we are counting down to the tokyo olympics. you see that as having an economic bump? >> the games lead to a lot of uncertainty. at the end of march, the government decided not to accept foreign spectators. that means bad news for japanese retailers because they cannot expect a lot of consumption from foreign tourist. we don't note to what extent japanese spectators will be welcomed at the stadium, so that is also a concern. if the government accepts only 15%, that still gives a bad impact on japanese consumption. there is a lot of uncertainty on the services area. haidi: we are just getting the numbers out now.
7:51 pm
japanese manufacturing coming in at five. estimates were for a contraction of minus one. when it comes to the nonmanufacturing index minus one is still better than minus four and an improvement from the previous month as well. the manufacturing outlook coming in line with expectations. nonmanufacturing outlook is at minus one. we are seeing some of the weakness play out when it comes to the non-men -- non-manufacturing sector. we expect to see a pullback in fiscal 2021. >> the results were already expected. there was an improvement in the manufacturing sector and also a pickup in the case of the
7:52 pm
manufacturing sector outlook. because the exporter continues to do well, especially to china. it seems to me that shortage of semi conductors has not impacted the outlook so i was a bit surprised. as expected, there was a slight improvement in the services sector mainly because there is a high demand for products and services. still we are facing an increasing number of infected people. still, the manufacturing sector remains very weak. shery: what do you make of the latest framework tweaks we saw
7:53 pm
from the bank of japan and how that would affect the rest of the economy? >> they announced in march that negative interest rate policy is not very good for the manufacturing sector. the bank of japan provided interest rates, and for the banks who are on the bank of japan and encourage lending they take it as confirmation that negative interest rates do not work, but at the same time, the bank of japan wanted to demonstrate there is a possibility of negative interest rates in case it is necessary.
7:54 pm
that is why they wanted to deuce it by eliminating stock purchases and they also get rid of the nikkei from the budget scope. they want to make it sustainable so the bank of japan and do this monetary easing a little longer. >> it has helped a lot that the japanese yen has been week. --weak. >> it is not because a bank of japan policy but the dollar index. because the bank of japan interest is much higher in some institutions are just unwilling
7:55 pm
to purchase u.s. index securities, that also contributed to depreciation. but that is very good for the japanese manufacturer. >> how much of a boost do you expect to see not from improvement in china but also demand from infrastructure spending and the overall amount we were spending in the u.s. for the next few years. >> for the japanese economy, the japanese economy is going to have a recovery process. we will have a decline in gdp in january and march but april will start to see some pickup. we have a lot of problems about inflected -- about infected people.
7:56 pm
its ability to recover to the level for covid-19, we still see some moderate economic growth. it is not as strong as the u.s.. >> former boj monetary policy board member sayuri shirai always great to have you on. and we are watching japan right now. some stocks we need to be watching in japan and korea after bidens 2.5 trillion dollar infrastructure plan. we are talking about the suppliers and material makers with u.s. operations, panasonic as well. here are some of the names to watch. of course, we do have those green initiatives coming from the biden package in the build
7:57 pm
back better plan. the market opens in tokyo. this is bloomberg.
7:58 pm
7:59 pm
8:00 pm
♪ shery: welcome to daybreak: asia from bloomberg world headquarters in new york. haidi: i'm in sydney, asia's major markets just open for trade. our top stores, president biden unveiled a spending plan worth more than $2 trillion, setting the stage for a battle in congress. republicans oppose raising taxes to pay for the program. traders assess markets, treasury
8:01 pm
yields assume they arise. we speak to the ceo of one of southeast asia's biggest online fashion retailers. the laura's -- zalora's george boubouras joins us. shery: export growth, 16.6% on the year, coming in line with estimates. this is double digit growth from growth of only around 9% in the previous month. when it comes to imports, south korea rise of 18.8% on the year, but missing expectations a little. the expectation was for growth of over 19%. this leaves a trade surplus of $4.175 billion in the month of march. we have seen a strong economic recovery globally, and that ellie helped exports of chips
8:02 pm
and cars for south korea. south korea very much embedded in the global supply chain, so it is seeing the upside of that. we are seeing the dollar-yuan trade like this, little strength after the korean yuan advanced for the first time in three days. local exporters are selling the dollar. we are seeing energy and tech names leading gains across south korea, but today we will also be watching renewables-related stocks, because we have that trillion dollars package announced year by president biden. so perhaps we could see some of those clean energy stocks react in south korea. assembly story -- a similar story for japan as well. you could see infrastructure stocks move a little bit, given they are also exposed to the u.s. market. the nikkei right now getting .9% while the japanese yen is
8:03 pm
holding steady after falling to the one-year low. it has been on a weakness trend, a weakening trend for the consecutive six or seven sessions of losses against the u.s. dollar. we just had the japan tent can -- tancan survey as well with numbers beating estimates. haidi: and getting some support from that weaker yen story. across the markets, u.s. futures trading modestly higher when it comes to the u.s. 10-year yield, unchanged at the moment, but we did see trading in the late u.s. afternoon, under pressure as the yield curve steepened into rebalancing. we are work -- we're looking at the worst quarter for treasuries since 1980. heading into the opec-plus meeting, oil has been taking a slide, but rebounding a little in the asian session, brent above $53 a barrel and a new york crude trading just under
8:04 pm
$60 a barrel. of course, there are ongoing growth concerns in europe, france entering another month-long lockdown, creating worries about summer crude demand. let's get perspective on markets from george boubouras, head of research at k2 asset management. george, always great to have you with us. given the market's position for reflation trade and expectations of infrastructure spending at the well-managed vaccine rollout scenario, how much juice is there to get from the binding administration announcement today? george: good morning. look, the administration announcement, infrastructure, long-awaited, productivity gains, but these are the stored -- these of the sort of spending plans future earnings should be aligned with. and they are very positive. this plan is the equivalent of just under 1% of gdp up to eight years. but it probably won't be bigger
8:05 pm
for wall street and corporate america in general because of the tax implications. i think all that stimulus, and transfer payment in calendar 20 as they come out of it, there is going to be payback from corporate america. and when you add state taxes, and you take corporate america potentially entire talk rates -- tax rates in the corporate market, that will be an issue to deal with. but in general, spending will increase the economy, and you just have to pay some back in additional taxes going forward. haidi: broadly speaking, where do you see opportunities this quarter? i am taking our mliv question of the day as we start a new
8:06 pm
quarter. there are still a lot of uncertainties where we see meaningful rotation and the value of tech and whether the fed will meet its inflation target, and the long-term trajectory of the dollar. george: there are a number of moving parts, as always. it is priced at a reasonable price, so if you are a value investor, this should be a sweet spot for the next two years. both at any price is very much 2020, behind us. that is what the yield curve is telling us. it is very realistic. u.s. treasury, one .75 or 2% nominal is extraordinarily realistic given economic activity in north america. yield curves would normally be much higher in the market should accommodate this, so a steeper yield curve and again, 10-year long bond yield around 175 should not stock markets, but it probably will.
8:07 pm
but it is very good for growth and rotation and value to continue, which has been dominating since the reflation trade of november of last year. once again, to make it clear, growth at any price is behind us. but that is not going to go away in a hurry. where the average cost of capital, looking at basic valuation as the dollar comes into play when yields are much higher than they were a year ago, that is quite realistic. shery: japanese shares outperforming their asian peers in the first quarter of this csi, the most since 2016. how much of a bid are they getting because of their cyclical nature? george: eight is a combination, it does have a sick -- it is a combination, it does have a cyclical nature to it. but there is a range globally, just like germany and broader europe, 50%, 55%. and then you have the high like
8:08 pm
south korea on the one-year up 74%. japan as i was going to be the beneficiary of that, -- japan is always going to be the beneficiary that, that is a cyclical, but it is a safe haven as well. you know that global growth and revisions are going to be higher from the imf, they will revise higher. that was no surprise. your left therefore with aggregate earnings and development is going to be expanding. it is just a question of a position itself to participate. and we look at that leverage to recovery and a slightly higher interest rate environment in the long into than what we had in 2020, and therefore, japan would dominate going forward in that play. but in broader europe, the u.k. market, and australia, they are
8:09 pm
laggards in this quarter and should catch up with higher yields. and even higher tax rates in north america, and prime the aussie market, for what it is worth. shery: george boubouras, great to have you on from k2 asset management, and his take on market moves paid let's get to vonnie quinn and first word news. vonnie: the biden administration raises concerns about policy tools china's using to restart its economy. support for domestic industries is resulting in discrimination alleged against foreign companies. it could damage long-term u.s. interests. the u.s. says it is working with japan of the european union to address china subsidies. one of hong kong's top officers is warning residents against testing a so-called redline when it comes to chinese-imposed security laws. in an interview with bloomberg,
8:10 pm
the deputy commissioner defended arrests in the wake of the bill passing, saying the city faces pressing national security threats, and he talked about the united states. >> i am talking about the united states and it is clearly stated what their intent is, to suppress the development of china. it is an open secret. vonnie: myanmar's ousted parliament is planning to set up a national unity government in defiance of the military junta that took our in a february coup. the new government will be a collection of all democratic forces with ethnic groups playing a key role. the military junta has declared the committee to be unlawful. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. ♪ haidi: still ahead on southeast
8:11 pm
asia, southeast asia's largest fashion platform turns a profit. k2 asset management c -- zalora ceo gunjan soni joins us. this is bloomberg. ♪
8:12 pm
8:13 pm
♪ shery: here are some stocks we are watching right now. check out toshiba. it is rising more than 7% now, after reports from dow jones that micron and western digital are each exploring a potential deal for the holdings company. this deal could be around $30 billion, as we continue to see a scramble for semiconductors
8:14 pm
globally. look at sk innovation as well, jumping at the moment. they planned an initial public offering of their separation unit that aims to raise as much as $2 billion. they are an energy supplier. and hitachi as well, reversing yesterday losses they will be buying software development company global logic for 8.5 billion dollars, one of the largest acquisitions ever for the japanese firm. we spoke to the hitachi ceo and the global logic ceo about how the merger will help drive growth. >> the pandemic overall has been really accelerating the migration to the cloud, fundamentally changing digital transformation. looking at global logic, we have been extremely confident with the business that they are in, and their forecast of the business. in addition to giving us the ability to drive international
8:15 pm
growth outside japan. so that is what drove us to go ahead and make this acquisition, and we are very excited about it. haidi: as to how the pandemic affected global logic's position going into this deal, and the most -- and what are the most attractive aspects of how it was done? >> digital transformation, companies are sitting on the fence in terms of going digital. and they all helped global logic is this because global logic business is mainly to get these companies in the digital information space. the sectors of government, media, those sectors clearly mirror the global logic's
8:16 pm
sectors. shery: one's global logic bringing to the table in this merger, especially when it comes to your global client network? >> number one is global logic's 60% of business are fortune 500 companies. we mary data together to see the world the way it should be today. and that is critical for companies that transform themselves and transform their clients. shery: when it comes to the business that global logic is joining, how much of it can come from overseas, what is the target? >> today, about 53% of our business is outside of japan. and the growth momentum that we are seeing across all of our businesses, whether that be our direct-to-customer businesses where we are delivering ip solutions and products, or our
8:17 pm
industrial businesses, everything from bullet trains and elevators to water systems and energy. we are seeing significant digitization up our businesses and we see global logic together with hi tachi to deliver the products that we have to our global clients as well as enabling their own aspirations. haidi: the businesses are different than the idea people have of hitachi as being an appliance maker. the ceo says this is a deal that could transform the company. how does this feed in to your view of how the company looking five years' time? >> it is fundamentally transformational for us at hitachi. every business line we are in,
8:18 pm
every product, digital is becoming more pervasive, and covid and the pandemic has accelerated that transformation. for us to be successful, we have to be as much of a technology company as much as we are a software company. global logic gives us the underpinnings to accelerate the journey for our customers. that is what makes us really excited about this. haidi: the ceos of global logic and hitachi, speaking to us earlier. plenty more to come. this is bloomberg. ♪
8:19 pm
8:20 pm
♪ haidi: police in hong kong can now that who will be candidates -- can now vet who will be
8:21 pm
candidates for public office in hong kong. our chief asia correspondent stephen engle spoke to officials about the changes. >> the risks to national security are real and i would say they are potential given this very hostile international environment we find ourselves in, especially because there are countries whose basic dna is aggressive. stephen: you are alluding to the united states? >> yes, i am talking about the united states and it is also clearly stated what their intent is, to suppress the development of china. and it is an open secret. stephen: so hong kong has been the pond, where we were led down this path to exerted policies by
8:22 pm
beijing? >> i think so. because this is in the interest of the americans to do that. and on the ground, i see evidence of such action. i am not trying to necessarily pass judgment, moral judgment, because our country tends to further its strategic interests, that is the country's prerogative. and we are entitled as a country to protect our own interests. stephen: what does that mean for the security blanket over hong kong -- more surveillance, more police on the streets, more review of social media? i am saying it is a police state, we are nowhere near there, but that is the international perception. >> that perception is wrong, because let me tell you this. as a police officer, our concern has always been issues whether
8:23 pm
you are safe, whether you feel safe going up at night. whether you feel safe to allow your teenage daughter to go out by herself. these are large issues. these are not political issues. we are entitled to security. we are entitled to stability. because that is the only way society can function. and i think the events of 2019 have shown you, when stability and security break stem, -- breaks down, society becomes totally dysfunctional. we were on the brink of collapse in many phases of the world. we tried to do our best, and if it happens again, we will do that again. stephen: how are you trying to repair the trust deficit that
8:24 pm
built up between the populace and hong kong police? it used to be referred to as asia's finest, the police force here, and i'm not saying it isn't anymore, but there are divisions in society and animosity toward police. >> i have to disagree. because this is propaganda. i feel it necessary to point this out because that is how propaganda works. stephen: fair enough. >> there is a trust deficit as a result of the propaganda. shery: let's cross over to hong kong and join chief asia correspondent stephen engle. that was a great conversation, and a heated conversation, what it looked like from here. stephen: it wasn't heated. it was frank and candid. and any interview should be, right? we talked about all the issues. that was a sliver of a very
8:25 pm
wide-ranging, half-hour conversation -- everything from how police are in some cases not well prepared when they go to court for the prosecution of some of these protesters, he commented on that, saying they need to better coach officers when they go to court so that they put the evidence forward clearly to magistrates. we talked extensively about redlines, because society wants to know, where, what can they do and cannot do under the new national security law? he said he took exception to my phrasing of that question. he said we should not be looking at where the red lines are, we should instead not be pushing the envelope, we should not being trying to touch the red line. we should be responsible citizens. i called him directly, "do not tempt the law, it is simple" so he is appealing to the hong
8:26 pm
kong people, there has been a trust deficit tilde because of friction in society. he said it will be the police's first move to try to bridge that trust deficit but again, he commented about propaganda and social media and he said social media and mainstream media have not worked to police advantage. it is a very interesting conversation. go online and find the whole interview. haidi: stephen engle, our chief north asia correspondent in hong kong. let's get a quick check of is this flash headlines. chinese regulators approved china cam and another company reconfiguration. both companies were added to the pentagon black list in 2024 alleged links to the chinese military. deutsche bank sold about $1
8:27 pm
billion in holdings seized in the archegos debacle. sources tell bloomberg the chairman executed a direct sale in a private deal after archegos margin loans. the deutsche bank sales rings to $30 billion the known value of unwinding of the firm. the chief executive francisco ferrari is stepping down after a troubled two and a half years at the helm. he will be replaced by deputy ceo alexis george. australia's largest wealth manager has had a year rocked by criticism and a sexual allegation. more data coming out of asia crossing the bloomberg in a few minutes time. we will also be getting trade and retail data from
8:28 pm
australia and how these numbers show the course of the recovery. lots more to come. this is bloomberg. ♪
8:29 pm
so jeff, you need all those screens streaming over your xfinity xfi... for your meeting? uhh yes. and your lucky jersey? oh, yeah. lauren, a cooler? it's hot. it's march. and jay, what's with all your screens? just checking in with my team... of colleagues. so you're all streaming on every device in the house, what?!! that was a foul. it's march... ...and you're definitely not watching basketball. no, no. i'm definitely not watching basketball. right... ( horn blaring )
8:30 pm
♪ haidi: we do have breaking trade numbers when it comes to australia, just out at the moment. when it comes to exports for the month of february, coming in at a contraction of 1%, worse than expectations of a modest gain of 1% and certainly down from january, when we saw a 6% surge in exports. imports, gaining 5%, better than expectations of a 4% gain, and back from a contraction of 2% in the previous month.
8:31 pm
we have also gotten retail sales, final month-to-month retail sales numbers from emory and a contraction of just .8%, revised to a better figure than the 1.1% fall we had in a preliminary number. a five-day lockdown for victoria and parts of western australia, impeding retail activity there. so that is a little improvement but that export number in particular, contributing to the narrower trade balance, would be a disappointment. vonnie quinn has first word headlines. vonnie: president biden revealed his massive infrastructure plan and is counting on business to pay for the $2 trillion deal. binding is spending on manufacturing, transportation, development at high-speed internet over eight years. he wants to increase the corporate tax to 28 percent and minimum taxes 21% on global corporate earnings. >> we are going to raise the
8:32 pm
corporate tax. it was 35%, which is too high. we all agreed five years ago it should go to 28%, but they reduced it to 21%. we will raise it back to 28%. no one should be able to complain about that. >> a trade organization is forecasting an 8% rise in global trade, the biggest increase since 2010. the director general says the projection would be tied to virus disruptions, warning new waves of infection could undermine into recovery. she also criticized vaccine nationalism, saying slower rollout could result in complicated forecast. >> no longer can we expect for companies to stand in a queue waiting for vaccines. the who said 70% of vaccine doses to date have been administered by 10 countries. the lack of access is glaring.
8:33 pm
vonnie: pfizer says it's covid-19 vaccine is 100% effective in children ages 12-15 and is seeking to add adolescents to fda authorization. the move could allow preteens and teens to get the shot before the next school year. it is already approved for teens ages 16 and older. pfizer and biontech plan to submit the data to american and european regulators as soon as possible. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. ♪ haidi: turning to europe, the ecb president says her focus remains on ensuring long-term economic growth even as the vaccination rollout has fallen short of expectations. she spoke in an exclusive interview with bloomberg's francine lacqua on what the ecb can do to aid in the recovery. >> we have an economic situation
8:34 pm
overall which, in this part of the world, europe, is marred by uncertainty. in that general macro economic situation marred by uncertainty, monetary policy and the ecb have to provide as much certainty as possible. this is really the aim of the most recent monetary policy decisions we have taken, clearly, in the scope of our mandate, which is price stability. but in the very exceptional circumstances that we are encountering, providing a degree of certainty is the best we can do at the moment. francine: given lockdowns and what is going on with vaccines in europe, has the balance of risks shifted since the last policy meeting? christine: well, the balance of risk is still template to the
8:35 pm
downside, in the short-term, because we are seeing a degree of uncertainty. we are seeing renewed lockdowns. we are seeing a vaccination rollout that is short of what we expected. but it is much more balanced in the medium-term. and we expect the vaccination rollout to proceed, we expect sufficient herd immunity to be reached at the appointed time in the future, and that leads us to have rebalanced a bit, our assessment of risk in the medium-term. so more balanced in the medium-term. francine: is it fair to assume then that you will be able to scale back some of the purchase program in june, given what you just said about the economy and that in the medium-term, it could get better? christine: my definition of the medium-term is different from the when you were mentioning. medium-term for us is a couple
8:36 pm
of years. and it actually fits with the pope for recovery -- with the hope for recovery, a return to the pre-covid-19 situation, which we estimate at mid 2022. what we decided most recently was to significantly increase the pace of purchase. and this is a decision that we have made in view of the circumstances, and with a view to preserving favorable financing conditions. we will reassess in due course on a quarterly basis, and in between as well, of course, to make sure our monetary policy is in line with our overall price stability objective, but also with the aim that we have of preserving financing, favorable financing conditions, which leads to more certainty, improves the confidence, hopefully induces consumers to
8:37 pm
consume and investors to invest. and this is what we are beginning to see, actually. shery: ecb president christine lagarde speaking exclusively with bloomberg's francine lacqua. we have the latest march manufacturing print out of asia, next picture in southeast asia because of record highs for manufacturing pmi's, vietnam at the highest since 2018, myanmar falling to a record low as we see clashes between the people and the military to. -- military junta. taiwan at its highest level in 11 years to read south korea coming in steady. in japan, bank any factoring pmi looking like this. let's cross our global economics and policy editor kathleen hays. let's discuss japan pmi, because we saw this acceleration at a time when we are also sing japan's largest manufacturers turn optimistic for the first time in years.
8:38 pm
kathleen: let's step back for a minute -- this is a broad, regional move. i think we are going to see more and more of this globally, because two big things are happening. like the international monetary fund said yesterday, next week with our report at the annual spring meeting, we are going to update global growth, update the u.s. and china. and they are pointing to the stimulus in the u.s.. that is one of the biggest things, as well as vaccine rollouts. they stumbled but are going forward. so a new look at these numbers. because just think back three or four months ago, they were lower, many countries below 50, and 50 is the dividing line between expansion and growth. as for japan, i like to look at exports because all asian nations are sort of or very export-dependent. japan is a big one. and if we look at a chart of their exports, they have a lot of down months and laughter
8:39 pm
during the pandemic, -- and last year, during the pandemic. but then they had enough month in february and a down month -- up month in january and a down month in february. people are concerned, exports to the u.s. have been weakened, especially automobiles that make up 19% of japan exports. and when the new year's holiday, the timing was a bit different, there was weaker demand for a while. so people have been writing this off. and i think when people see this one indication of manufacturing going higher, they will probably be a little more optimistic for japan. we also got south korean export numbers, and they are the highest in 2018, i believe, at 16.6%. this is a bellwether for asia. this is the 11th-biggest country in the world but the fourth-biggest exporter in the world. when things look better for
8:40 pm
korea, it is a good sign for the region. haidi: what does that tell us about taiwan, which has been on fire, as well as some of the aussie on countries -- asean countries? kathleen: taiwan is such a big story, there manufacturing pmi went even higher. and if you look at their exports, they are booming, exports hit a record. we are showing it in the chart. you can see their currency at a record high. so the chip story has certainly been helping them. they have had nine straight months of export increases. taiwan is sitting pretty. and chip shortages help korea, help so many countries, because people buy them from everybody. ended think for the rest of the region -- and i think for the rest of the region, thailand still below the 50 mark, but moving higher.
8:41 pm
thailand is also a fairly export-dependent economy. they have to trouble with the virus, all sorts of troubles, but even with the smaller asean countries, it seems we are seeing hope. again, he comes back to the virus. but still, the u.s. stimulus creates more u.s. demand for exports creates more demands for china exports, which helps china grow and also countries in the bigger asia region. it is a story that all fits together. haidi: our global economics editor kathleen hays pulling it altogether for us in the region. coming up, southeast asia's biggest fashion platform turns a profit. the ceo gunjan soni joins us next. this is bloomberg. ♪
8:42 pm
8:43 pm
shery: southeast asia's largest e-commerce fashion platform, zalora, turning a profit in the first quarter of 2020 and adding brands to its product offering. joining us exclusively is ceo gunjan soni. thank you for your time today. tell us, what are people buying? gunjan: there has been a dramatic shift in demand patterns, for sure.
8:44 pm
we saw in most of last year growth in our category of women's apparel and shoes and they are not buying high heels and dresses anymore. on the other hand, we saw a dramatic increase in loungewear. also very interesting categories we focused on last year, kids apparel, and beauty saw growth, especially skincare and haircare regimen product. we saw surprisingly healthy traction in our luxury segment. they are all categories which are suffering, but there is a lot of demand for these emerging categories we saw. shery: you have a presence across seven regions in asia. where are you seeing strongest demand? gunjan: it is across the board. for most of last year, we saw shifts in patterns. given the intensity of the
8:45 pm
pandemic and the lockdown, we saw demand go up and down, for example, in most of march and april last year. because it was the early stage of the first very high lockdown that the country saw, while it was figuring out policies around supporting e-commerce. in contrast, in the first part of th we are -- we are seeing an increase in women's apparel in singapore especially. haidi: what changed in terms of spending patterns in the level of demand? ? you were expecting gunjan: -- demand you were expecting? gunjan: it is a positive trend overall for e-commerce, and we see that in new customer acquisition. and as use cases for some lower categories like women's apparel and shoes come back, we will see profitability on that front.
8:46 pm
but meanwhile, while people are still working at home, we see home living, loungewear showing strong momentum. and kids apparel, that category i see as very resilient, even in the ups and downs of the pandemic. haidi: where are using the most growth opportunities out of the seven markets in the region that you operated? gunjan: there is growth across the board. we are seeing high traction in the philippines and malaysia, especially with the adoption of e-commerce shifting dramatically. and also in malaysia and indonesia, there is usually an uptick in demand for our kind of category. shery: given the pandemic, it
8:47 pm
seems everybody was to get into e-commerce. are you concerned about competition? what is your edge? gunjan: i would say our biggest edge is the quality of the software and the fact that we only work with rent partners, which is our promise to our customers, especially in a region where there can be a lot of fake products that become available from indirect sellers. that is the core of our proposition, but we are also specialists in using technology in creating new interfaces for customers to be able to buy. for example, last year we launched a feature that allows you to shop all in one place, we are introducing live streaming and as people get more comfortable with e-commerce, it will be a big differentiator for
8:48 pm
interesting experiences online, to create a bridge for what they used to experience off-line. shery: you also launched a new data analytics solution. what is all this telling you about different nuances between regions on what people want? gunjan: first and foremost, we launched the service with our brand partners, because they were troubling to figure out what was happening as demand patterns were shifting very rapidly. this service allows you to look at our transactional data at a category and subcategory level and be able to decide what should be in your manufacturing line for the southeast asian market, with a fair degree of familiarity. some of it shows interesting trends. we think the future is going to
8:49 pm
be younger and women-centric. women tend to be very concentrated buyers of e-commerce across categories, particularly in the fashion and lifestyle category, and they are also making purchases on behalf of the family. so it is a very interesting time. the fact that the population of southeast asia as young as well known, but the fact that this population now has aspirations for global brands creates a handy mix for global brands to go after the segment sooner rather than later. we also see a very good uptick for local brands, and we partner with them also strongly during this, as they face challenges in their portfolio, to allow them to capture the e-commerce trade. haidi: gunjan soni, zalora group
8:50 pm
ceo, great to have you with us. a comeback for a shadow from alibaba and tencent. in an exclusive interview, the ceo and cofounder robin li tells us about baidu's transformation. >> typically, it takes five years to get a product of the market. we will try to get it to get into the market sooner rather than later. last year, we spent about $20 billion on our end d -- on r&d, more than any other company has spent. we are determined to spend a lot of money for the next 10, 20 years. to be sure, we have to invest in the strongest platforms. tom: sounds like elon musk, do you think you will take on tesla? >> i think we are quite different.
8:51 pm
we are an open platform. we want everybody to be successful. we don't just want to build our own car. in addition to the venture g2, we also supply technology to others. we want them to use our capabilities. and we want consumers to enjoy self-driving cars sooner rather than later. we want safer ride-hailing cars. there are lots of things we can do and we will partner with people to do that. this is very different from tesla. shery: the bloomberg special, a conversation with robin li this friday at 5:00 p.m. hong kong. ♪
8:52 pm
8:53 pm
♪ shery: a quick check of business flash headlines, goldman sachs close to offering investment vehicles for bitcoin and digital assets as part of its wealth management unit. the bank named mary richards global head of digital assets and plans to begin the offerings and physical that coin, derivatives or traditional investment vehicles in the second quarter. india's first unicode and moby is set to go public at a u.s.
8:54 pm
listing that could offer as much as $1 billion and value the company up to $15 billion. the mobile advertising service business is banked -- backed by softbank. jp morgan, goldman sachs and citigroup are said to be working on the ipo. this ipo failed to deliver gains for investors, stock collapsing what he 6% on its london debut. criticism of company labor practice and corporate governance resulted in the worst performance in decades for a big listing in the u.k. haidi: we are seeing stocks head for hollywood now. we have seen a populist explosion in the mainstream of stock trading with the likes of robinhood endgame stock and that saga, but now we are hearing popstar miley cyrus is promoting $1 million worth of stocks.
8:55 pm
she has paired with cash app and is tweeting this and sending it to her followers. it comes on the fifth -- a comes on the anniversary of the tv series which she is known, "hannah montana." shery: people who are for this movement say getting more people into the stock market means democratization of these trades, but if you take a look at the risk that comes with it, this is gameification of the stock market good controversial to where this is headed, retail investors not only crowding the stocks, but also elon musk's tesla or gme gamestop. haidi: it is quite incredible seeing the pop culture cachet for something that was previously regarded as pretty boring, financial instruments handled by big bankers and wall street and now, it is really
8:56 pm
starting to capture the imagination of a much younger proud, miley cyrus, this isn't the first time she has had business dealings, she has backed a number of startups including a franchise of cannabis lounges in the u.s. so she really has commercial savvy and now is taking her attention to stock trading for her viewers. we are going to get the outlook for tech, the second quarter kicking off, and the outlook for the next quarter. that is it for "daybreak asia." we are looking toward the start of trading in hong kong, shanghai and shenzhen. stay with us. "the china open" is almost upon us. this is bloomberg. ♪
8:57 pm
8:58 pm
8:59 pm
9:00 pm
david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind, i've often thought, was private equity. [laughter] and then i started interviewing. i watched your interviews, so i know how to do some interviewing. i learned from doing interviews how leaders make it to the top. >> i asked how much he wanted. he said 250. i said fine. i did not negotiate with him. i did no due diligence. >> i have something i would like to sell. [laughter] and how they stay there. you don't feel inadequate being the second wealthiest man in t

4 Views

info Stream Only

Uploaded by TV Archive on